By JONATHAN CHENG

Stocks rose as the Federal Reserve's promise of continued easy-monetary policies helped offset the latest flare-up in Europe's debt crisis.

The Dow industrials pushed up to levels hit before a weekend flare-up in Europe's debt crisis, after the Fed reiterated its promise of continued easy-monetary policies. Kaitlyn Kiernan reports. Photo: AP.

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Trader Fred Reimer works on the floor of the New York Stock Exchange on Wednesday when the DJIA set another intraday record.

The Dow Jones Industrial Average gained 55.91 points, or 0.4%, to 14511.73, for its second straight day of gains. The blue-chip measure rose as much as 91 points in intraday trading, briefly moving above its intraday record from last Thursday.

The Standard & Poor's 500-stock index tacked on 10.37 points, or 0.7%, to 1558.71, while the Nasdaq (NDAQ) Composite Index rose 25.09 points, or 0.8%, to 3254.19.

The broad gains, which saw all but one of the 10 S&P 500 sectors finish in positive territory, came after the Fed said it would continue buying $85 billion in bonds each month to support the economic recovery. At a news conference, Fed Chairman Ben Bernanke said he didn't see the recent stock-market gains as out of line with historical patterns and underscored the central bank's commitment to monitoring developments in Cyprus.

"The biggest risk for the current bull market is a policy mistake by the Fed, or the European Central Bank, or the Bank of Japan, or the European Union, and we got a good sneak preview of that with Cyprus," said Burt White, chief investment officer at LPL Financial in Boston. "Fortunately, $85 billion a month is an enormous amount of stimulus, and that trumps virtually all other uncertainties, as bad as Cyprus is."

Leading the stock gains Wednesday were the two consumer sectors, consumer discretionary and consumer staples. Coca-Cola (KO) led the Dow components, rising 54 cents, or 1.4%, to $39.87, while American Express (AXP) advanced 87 cents, or 1.3%, to 66, and Walt Disney (DIS) picked up 63 cents, or 1.1%, to 56.94.

Industrial and telecommunications stocks were the weakest performers. Caterpillar (CAT) dragged on the Dow, falling 1.33, or 1.5%, to 86.94, after the heavy-equipment maker reported accelerating retail-sales declines for the three months ended in February, with particular weakness in the Asian-Pacific region.

Also giving investors pause was FedEx (FDX), which tumbled 7.33, or 6.9%, to 99.13, after the package-delivery company's quarterly earnings missed analyst estimates. The company reported weakness in the international airfreight market and provided a downbeat current-quarter earnings outlook.

The Dow Jones Transportation Average, an index of 20 railroad, shipping and airline stocks, pulled back 0.4%.

After the market's strong, steady rise to kick off the year, investors have been wrestling with a bout of volatility in recent days, thanks in part to concerns over a bailout of Cyprus's banking system.

Matt Jarzemsky explains traders will be listening carefully to Federal Reserve's economic outlook and chairman Ben Bernanke's comments on the strength of the economy. Photo: AP Images.

"I don't think Cyprus is completely behind us—it will continue to raise its head—but it was really more of an excuse for the market to take a little bit of profit," said Robert Pavlik, chief market strategist at Banyan Partners.

European markets gained ground. Cyprus Finance Minister Michalis Sarris, in Russia to discuss financial support, said talks were "very constructive" but that there was no agreement on potential loans.

Investors are talking about how the Fed just might pull this off, but there might be some risks to avoid still. Steve Blumenthal, CMG Wealth Management CEO, joins Markets Hub. Photo: Getty Images.

The Stoxx Europe 600 edged up 0.3%, snapping a three-session losing streak. In London, the FTSE 100 gave up 0.1% for its fourth straight loss, after the U.K. said the number of unemployed in the three months ended in January rose, the first increase since the three months to January 2012.

In China, the Shanghai Composite Index climbed 2.7%, led by banks and developers, to a two-week high, ahead of Thursday's release of preliminary manufacturing data. The Japanese market was closed for a holiday.

Crude-oil prices rose 0.9%, to settle at $92.96 a barrel, but gold slipped 0.2%, to settle $1,607.50 a troy ounce. The dollar fell against the euro but rose versus the yen. Demand for Treasurys fell, pushing the yield on the 10-year note up to 1.936%.

In corporate news, Adobe Systems (ADBE) climbed 1.71, or 4.2%, to 42.46, as subscriptions for its digital creative and marketing services topped expectations.

Markets, which were at all-time highs, took the Fed decision in stride. Tomi Kilgore reports. Photo: AP.

Lennar (LEN) picked up 1.98, or 4.8%, to 43.40, to close at a five-year high, after the home builder's quarterly earnings blew out estimates amid strong revenue growth and double-digit-percentage growth in orders and backlog.

Williams-Sonoma (WSM) gained 4.64, or 10%, to 49.85, after reporting better-than-expected quarterly earnings and revenue. The housewares and furniture company also increased its dividend and approved $750 million in stock buybacks.

Among new listings, Model N surged 4.48, or 29%, to 19.98, after the company, which makes revenue-management software for pharmaceutical and technology companies, sold more shares at a higher price than it had originally indicated.

Tetraphase Pharmaceuticals finished flat after the clinical-stage biopharmaceutical company priced its shares at $7, below its previously indicated range.

Write to Jonathan Cheng at jonathan.cheng@wsj.com